Class CNBC Interview 12/9/22
December 9, 2022
La cautela dei CEO delle banche Usa preoccupa
December 12, 2022A worker arranges slabs in the factory at IceStone, a manufacturer of recycled glass countertops and surfaces, in New York City, New York, U.S., June 3, 2021. REUTERS/Andrew Kelly/File Photo/File Photo
NEW YORK, Dec 9 (Reuters) – U.S. producer prices increased a bit more than expected in November, but the underlying trend in inflation is moderating, which could allow the Federal Reserve to slow its pace of interest rate hikes next week.
The producer price index for final demand rose 0.3% last month, the Labor Department said on Friday. Data for October was revised higher to show the PPI gaining 0.3% instead of 0.2% as previously reported. In the 12 months through November, the PPI increased 7.4% after advancing 8.1% in October. Economists polled by Reuters had forecast the PPI climbing 0.2% and rising 7.2% year-on-year.
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MARKET REACTION:
STOCKS: S&P 500 futures turned down 0.3% pointing to a weak opening on Wall Street
BONDS: The yield on 10-year Treasury notes rose and was up 1 basis points at 3.503%; The two-year U.S. Treasury yield rose and was up 0.7 basis points at 4.319%.
FOREX: The dollar turned higher and the euro was pared a slight gain, trading about unchanged.
COMMENTS:
IAN LYNGEN, HEAD OF US RATES STRATEGY, BMO CAPITAL MARKETS, NEW YORK
“PPI in November surprised on the upside at 0.3% MoM vs. 0.2% MoM expected and the prior read was revised to 0.3% MoM vs. 0.2% MoM. This brings the YoY pace to 7.4% compared to the forecast for a 7.2% print and 8.1% Oct. The strength of the data was broad based with ex-food, energy, and trade also topping estimates at 0.3% MoM vs. 0.1% MoM anticipated in an acceleration from last month’s 0.2% MoM print. Extrapolating this to the YoY pace we see a 4.9% read — down from 5.4% in Oct, but well above the 4.7% consensus. It was a stronger read on prices to be sure that will leave the market cautious on a similar outcome next week when we see the consumer price update.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“It’s disappointing, higher than expected. The markets have reversed from positive to negative. On a year-to-year basis it’s a bit lower. It’s not the end of the world. But certainly, a negative surprise for the markets.”
“It still shows inflationary pressures in the pipeline and that’s not good news for the Fed. If there’s any positive signs it’s the yearly decline.”
“Bottom line is inflation is in a down-trend but month-on-month it’s hotter than expected. Markets always look at the monthly topline.”
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ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD
“The Fed realizes that the work that they’ve done so far does take some time to have an effect. There’s a lag effect and so I don’t think it’s going to sway them from their path of 50 more basis points next week.”
“It’s going to be 50 basis points next week and then another 50 basis points at the end of February post which inflation will start to show some cooling, hopefully. Then, in March I expect it to be a 25 basis points after which they’ll hold to see how all these rate hikes have played out unless something dramatic happens. I foresee that’ll be the Fed’s glide path right now.”
Compiled by the Global Finance & Markets Breaking News team
Our Standards: The Thomson Reuters Trust Principles.
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